IIRC organizations promoting civil rights like the NAACP long predated MLK. Assuming the KKK acted to suppress such groups, what would the blacks do? What MLK actually did hoping to turn public opinion in their favor? Or leave the US and go to Canada, Liberia or the UK?
Btw in the late '30s the German American Bund seemed to be growing, though I'd assume they'd have to accept nongermans and broaden their base to gain power. I don't know much about the Bund, but I'd assume they were more respectable for a time than the KKK with burning crosses, grand wizards and white robes...
Why would the German American Bund be any more acceptable than the Klan, unless this is the late 1930s Klan we're talking about. The Klan were American nationalists, the German American Bund were there to support a foreign government and foreign country.
Hughes wins in 1916 and joins WW1. Harding dies earlier, and a brokered 1920 GOP Convention picks a Governor (preferably Indiana) as a compromise candidate. His KKK membership is secret.
He wins, and have his VP "killed" by a supposed communist immigrant or communist black. Could be false flag. His KKK membership is now public and the numbers in the group swell as national fevor gets several anti black laws passed (like OTL Mann Act) with the NAACP and other groups targeted and arrested. Immigration (except from Nordic nations) is ended. Jim Crow is now nationwide except for some major northern cities. Black newspapers are shut down for "traitorous" statements.
Lots of pro Klan movies and radio specials are produced. Anything against the Klan produced in Hollywood is suppressed. The separation of church and state is blurred with biblical statements printed on money and painting and statutes displayed in government buildings. Massive rallies are held in the Midwest corn fields with thousands of members.
The KKK basically starts controlling several governors, state houses, senators, and congressman. They use fear tactics and imitation to suppress voters Eventually the Great Depression starts (probably much worst) and the nation is sick and tired of the KKK and votes for a Republican candidate who is nominates without southern support. A scandal like OTL surely would have broken out.
I suspect a violent insurrection by the KKK to stay in power occurs. They will be defeated but the violence won't end until WW2 and the country turns strongly against racism like the nazis
Was Harding actually a KKK member OTL? I've seen conflicting statements about it. Regardless of whether he was or not, it isn't totally ASB for him to join the Klan.
Pro-Klan movies? I suppose the entirety of Thomas Dixon's Ku Klux Klan Trilogy could be adapted into film, although I bet that even in the day, Birth of a Nation is going to be the only one well-liked.
There really was no Klan position as such on most economic issues. Politicians who were members of or backed by the Klan ranged from ultra-conservatives to progressives like Hugo Black. Klansmen sometimes broke strikes and sometimes supported them.
Really, a lot of people are making assumptions based on an oversimplified image of the Klan as a tightly-controlled centralized organization imposing a "line" on every issue on everyone affiliated with it--like the Communist Party.
I wonder if even attempting to establish a Klan position (within the Klan itself) on those issues would mean that even the second Klan ruling America is ASB.
The Klan would have being left-leaning on economic issues: "welfare for white people", Woodrew Wilson was progressive economically and the core of a KKK US government would have being poor southern whites which otl were the core of the new deal coalition and had being part of economically populist, anti-business/bank coalitions dating back to Andrew Jackson.
Strengthening the Klan in the South would get them into conflict with local political machines. But I suppose these are yet other groups for the Klan to somehow co-opt.